A product funnel is a marketing strategy. It’s based on the notion that the best prospects for future sales are people who have bought something from you in the past.
It’s not entirely restricted to sales, of course, and that’s why your e-mail list is your most important marketing tool. Every time we make a decision, it influences future decisions. Subconsciously, we’ll want future decisions to reinforce the fact that our original decision was a good one, so once we’ve decided to trust someone with our e-mail address, we’re much more likely to trust them with a small purchase. Assuming that purchase goes well, we’re more likely to trust someone with a larger purchase, and if that one goes well, a larger one, and so on.
Of course, fewer and fewer people are going to make each successively larger purchase because sometimes price is a determining factor. You’ll get a lot of e-mail signups with a free, downloadable resource. You’ll be able to sell some of those people something that costs a little money, and you’ll be able to sell some of those people something that costs a little more.
When it comes down to it, a funnel is a series of transactions designed to build trust and convince those who are mildly interested to buy your truly high ticket items.
When people talk about “getting a funnel in place” it generally means getting a series of products in place, along with an e-mail autoresponder that leads from one purchase to another. Once you’ve got an automated funnel in place, you can scale your business simply by driving more—often paid—traffic to the start of your funnel.
If you know that driving 1000 people to your funnel-starter results in $5000 profit, you can afford to take $2000 of that profit and use it to drive more and more people to the funnel-starter.
Lest it sound easy, I need to provide three caveats.
- Funnels have to be profitable on a small scale first.
- You can’t ramp things up from a few hundred people a month to tens of thousands. You have to ramp things up slowly and tweak everything in your funnel as you go to ensure profitability.
- Funnels are often complicated, and there are several points of potential failure along the way, every one of which could fail at any particular time. Funnels require maintenance.